Business Secretary Slammed For Ignoring Proof Of Pub Adjudicator’s Ongoing Financial Links To The Pub Companies

businessBusiness Secretary, Greg Clark MP, was criticised in the House of Commons for ignoring proof that he was sent about financial conflicts of interest held by Paul Newby, the pubs code adjudicator.

This was despite the cross party Business Select Committee also recommending that Mr Newby be replaced. Despite it taking an unreasonable four months for Mr Clark to reply to the letter from the Chair of the Select Committee, Iain Wright MP and when the reply came, it simply said that the Secretary of State hadn’t seen fit to look again at the appointment and will not be reopening the matter.

Greg Mulholland MP, Chair of the British Pub Confederation and also the Parliamentary Save the Pub Group raised the matter at questions on business of the House of Commons and requested an urgent debate on the matter.

Mr Newby’s appointment as the adjudicator was subject to significant controversy after many of his clear conflicts of interest came to light. Conflicts of interest that were neither properly discussed during his recruitment nor understood by those conducting the recruitment process. Mr Newby is expected to adjudicate in disputes between large pub companies and their tied tenants, despite his existing personal loans to his former employers that are dependent on them representing and working for the large pubcos he is now supposed to regulate. The loans that he is owed, estimated to be £233,000, to Fleurets, are dependent on the success of pub companies giving Fleurets income including representing them against tenants.

It is also now clear that many tenants tied to the large 6 pub companies are being denied their right to the Market Rent Only option and Mr Newby has failed to act to stop this. Hundreds of tenants are reporting that their pubco is blocking their right to an independent rent assessment. Mr Newby has also refused all requests to stand down as arbitrator where tenants have asked for this, citing a lack of confidence in his impartiality. Most absurdly of all, Mr Newby who has a clear and disqualifying conflict of interest due to his ongoing financial links to the pubcos, is now writing his office’s conflict of interest policy and simply declaring he doesn’t have any!

Mr Newby was also revealed to have misled the Select Committee over the reality of his financial links with Fleurets when he was questioned about his appointment. Specifically regarding his role at Fleurets and the nature of his shareholdings there.

In July, the Business Select Committee formally recommended, and wrote to Greg Clark, that Mr Newby must be replaced as the adjudicator as he would not be able to command the confidence of tenants. Subsequently the British Pub Confederation had written in detail to the Department, who have simply refused to properly investigate Mr Newby’s ongoing financial links to the pubcos. The Confederation have also received many reports of pubcos blocking the market rent only (MRO) process, while the adjudicator takes no action.

Speaking today in the House of Commons, Greg Mulholland MP, Chair of the Parliamentary Save the Pub Group and of the British Pub Confederation, said:

“The Secretary of State for Business was sent proof that Paul Newby, the adjudicator, has existing loans and shares dependent on income from the pubcos he is supposed to adjudicate. And yet it took four months for the Secretary of State to respond to the BIS Select Committee’s recommendation that the appointment be rescinded, simply saying he was not going to look at the matter. That’s not good enough. People are being denied the right to the market rent only option that this House voted for and Mr Newby is doing nothing about it. Can we have an urgent debate in government time on this matter?”

Commenting after, Greg Mulholland said:

“Ministers are ignoring the evidence they have been sent about Paul Newby’s clear financial conflicts of interest and are ignoring the failure of civil servants and previous Ministers who made a wholly inappropriate appointment, it is a whitewash.

We have a situation where the person in the quasi-judicial role of Pubs Code Adjudicator, whose job it is to regulate the large pubcos, has loan repayments and shares that are dependent on those very pub companies getting income. It is extraordinary, disgraceful and to tied tenants up and down the country, it stinks.

“We are also getting many reports of these very pubcos blocking and denying tenants the right to seek the market rent only option which they are legally entitled to, which is of course also blocking the will of Parliament. Yet Mr Newby is doing absolutely nothing about this which further shows the extremely inappropriate nature of his appointment and his inability or unwillingness to perform his role. Ministers are going to have to come to the House of Commons and give a proper account of this fiasco rather than simply and incorrectly claiming there is nothing wrong.”